How Blockchain Can Help Fight Digital Ad Fraud

I admit it. Blockchain is a hard thing to wrap your mind around. The worst part is, one you succeed in wrapping your mind around it, blockchain doesn’t seem all that exciting. Basically, blockchain offers a new way to store, verify, and secure data. Yay? Yes, yay.

Well, how about this. If you are a digital consultant, blockchain technology might turn your business model on its head in the not-too-distant future. Blockchain may be esoteric, but it also could be the margin-crushing, tech boogie-man under the bed. The more you understand about it now, the better.

Where does that 75 cents go? Well, some of it is just wasted on ads that are never seen, at least by real people. Then there also might be some data onboarding fees, and likely a few markups along the way from the assortment of vendors between the publisher, and the marketer. And don’t forget the tasks that remain manual for many agencies, think reporting. This cost gets passed on to advertisers as well.

So we have someone who is providing a valuable good or service. In this case the publisher has ad inventory to sell. We also have the marketer, who wants to purchase this inventory.

Now, imagine there was a secure digital ledger that could track programmatic inventory from the publisher, as it makes its journey through the labyrinth of middleman, so the marketer has more transparency into how much they really getting for their budget.

Yes, blockchain can do this. That’s why some of the biggest marketers in the world like Anheuser Busch, Pfizer, and Kellogg are getting behind blockchain initiatives, and partnering with startups piloting technology built to shine a light on the “tech tax” created in the media supply chain.

Amino Payments, based in Philadelphia, Pa., directly connects publishers and advertisers. The company claims their technology can track “literally every penny” of online ad buys. Just spitballing here, but not sure digital agencies would be all that comfortable with their margin hanging out there for clients to see, like a pair of underwear dangling on the clothesline.

So what can you do if you’re a digital agency to prepare for the margin wrecking ball of blockchain hitting your business?

Wait it out

Political is typically three-five years behind brands when it comes to digital. Depending on who you want to believe, blockchain will not descend upon programmatic in a meaningful way for at least a few more years. If you add in the political latency, it could be five-seven years before campaign clients would expect this type of transparency. Maybe the Yellowstone Supervolcano goes off by then and we have bigger things to worry about.

Embrace it early

Sure, as an agency maybe your margins will be cut, but transparency is good. Your clients will appreciate it. They’ll also like the fact that you are using the most cutting edge technology to make sure they are getting the most out of their budget.

Add more value

Agencies will have to add more value to clients to justify their margins. This is not as much of an issue in a highly niche market like campaigns. Relationships are critical, and expertise, particularly when it comes technology is always in demand. There is definitely a premium for guiding clients through the forest.

And in an Orwellian twist, maybe the big advertisers banking on blockchain shouldn’t be trusted. After all, blockchain technology like Bitcoin is not owned by anyone, it’s a public blockchain. This means there is extensive oversight ensuring the ledger can’t be tampered with by a third party. There are no such guarantees in a private blockchain run buy profit-driven companies.

So where is this going? Man, if I knew more I would have bought Bitcoin in 2010. The one thing we do know is that blockchain is already really good at connecting buyers and sellers, minimizing, and in some cases, eliminating the value of intermediaries and middlemen. We all know digital is not running short on middlemen. Prepare accordingly.